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Amazon and Tesla are Headed to Court in California

Written by Kevin TruongPublished Sep. 14, 2022 • 5:04pm
California Attorney General Rob Bonta has filed suit against Amazon over alleged anticompetitive practices. | Genaro Molina / Los Angeles Times via Getty Images

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California attorneys are looking to rein in two major tech firms for allegedly hurting consumers. 

A pair of lawsuits were filed on Wednesday, one claiming that Amazon illegally inflates prices and another accusing Tesla of deceiving customers about the effectiveness of its self-driving technology. 

California Attorney General Rob Bonta filed suit against Amazon on Wednesday in San Francisco Superior Court, saying the e-commerce giant engaged in anti-competitive contracting practices that have raised prices for California consumers. 

The state’s legal filing says, essentially, that the e-commerce giant uses its market dominance to hurt third-party merchants’ ability to lower prices on non-Amazon websites, including their own. 

If the merchant does not comply, they can be subject to penalties by Amazon like the removal of “Buy Now” or “Add to Cart” functions and ultimately suspension of their ability to sell on the platform, according to the lawsuit. This inflates prices for consumers and impairs competition, said the filing. 

“With other e-commerce platforms unable to compete on price, consumers turn to Amazon as a one-stop shop for all their purchases,” Bonta said in a statement. “The reality is: Many of the products we buy online would be cheaper if market forces were left unconstrained.”

Bonta’s effort to bring Amazon to heel mirrors another case filed by Washington, D.C., which was later dismissed by a judge. Earlier this year, Washington state won a $2.25 million settlement against the company over price-fixing practices. 

Bonta’s lawsuit is seeking damages to compensate consumers, among other remediations. Amazon did not immediately respond to a request for comment.

Another lawsuit filed on Wednesday against electric car market Tesla in the U.S. Northern District of California is seeking class-action status for what it characterized as years of “misleading and deceptive statements” regarding the company’s self-driving technology. 

The lawsuit follows similar allegations by California’s Department of Motor Vehicles (DMV), which filed two complaints with the state’s Office of Administrative Hearings saying the carmaker overstated the ability of Tesla’s Autopilot and Full Self-Driving technologies on its website. The DMV’s filings were cited in the class action lawsuit filed on Wednesday as evidence of Tesla’s deceptions. 

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Tesla did not immediately reply to a request for comment. 

The electric carmaker is also under investigation by federal regulators, including the National Highway Traffic Safety Administration, which is examining whether the use of Tesla’s Autopilot system increases the risk of accidents

The named plaintiff in the class action complaint, Briggs Matsko, purchased a 2018 Tesla Model X and paid an additional $5,000 for the company’s Enhanced Autopilot system. Among other claims, Matsko said that based on the company’s statements he believed the technology he purchased would soon be fully self-driving in all situations. Four years later, that hasn’t happened. 

The complaint accuses the company and its leadership of continuing to make false promises “to generate media attention, to deceive consumers into believing it has unrivaled cutting-edge technology, and to establish itself as a leading player in the fast-growing electric vehicle market.”

For relief, the plaintiff is seeking to stop Tesla from continuing its “deceptive and misleading marketing,” restitution for the money paid for technology that never was delivered and damages. 

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Kevin Truong can be reached at [email protected]




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